Corporate | 11 December 2008 08:00
EVN AG / Final Results/Final Results
Release of a Corporate News, transmitted by DGAP - a company of EquityStory
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(October 1, 2007 – September 30, 2008)
> Weather-related increase in Energy segment sales volumes and revenues,
revenue decline in the Environmental Services segment
> Majority shareholding in Rohöl-Aufsuchung AG
> Initial consolidation of Bulgaria’s second largest district heating
company in Plovdiv
> Conclusion of negotiations to obtain a concession to build three
hydroelectric power plants on the Devoll River in Albania
> Acquisition of a 49% stake in the Sankt Pölten district heating company
Fernwärme St. Pölten GmbH
> Market entry in Montenegro by the Environmental Services segment
> Capital increase from non-appropriated reserves and stock split in a
ratio of 1:4 effective April 17, 2008
> Start of a share buyback programme as of July 24, 2008
2007/08 Change
EUR m in %
Revenue 2,397.0 +7.3
EBITDA 362.3 +3.3
Results from operating activities (EBIT) 166.6 -15.6
Group net profit 186.9 -17.7
The energy sector environment in the 2007/08 financial year (October 1,
2007 – September 30, 2008) was characterised by lower temperatures,
increasing electricity wholesale and primary energy prices and a stable
cyclical environment in Austria, accompanied by a dynamic economic
development in South-eastern Europe.
Revenue increase in the Energy segment but revenue decline in the
Environmental Services segment
Against this backdrop, the EVN Group succeeded in increasing its total
revenue by 7.3%, to EUR 2,397.0m. In the Energy segment, the lower
temperatures compared to the preceding year led to a rise in Energy segment
revenue by 12.9%, to EUR 2,182.3m. The Environmental Services segment,
subject to project-specific fluctuations, registered a 32.9% drop in
revenue, to EUR 184.6m. Revenue generated outside of the Austrian market
rose from EUR 833.0m in 2006/07 to EUR 875.7m in the period under review,
which corresponds to a 36.5% share of revenue generated abroad.
The results from operating activities (EBIT) decreased by 15.6%, to EUR
166.6m, which can be attributed to the massive increase in electricity
procurement and primary energy prices as well as higher personnel expenses,
depreciation and amortisation. In the light of the lower financial results
and a reduction in the income tax expense, Group net profit for the 2007/08
financial year amounted to EUR 186.9m, 17.7% below the level of the
preceding year. Earnings per share totalled EUR 1.14, down from EUR 1.39 in
2006/07 (adjusted to reflect the stock split in a ratio of 1:4).
Increase in primary energy and electricity market prices, rising efficiency
based on successful restructuring in South-eastern Europe
The significant rise in primary energy and electricity market prices as
well as higher sales volumes led to a 17.0% increase in the item
'Electricity purchases and primary energy expenses', to EUR 1,375.8m. In
contrast, the cost of materials and services declined, which is primarily
related to the lower project volume in the Environmental Services segment.
In the 2007/08 financial year, the EVN Group reduced its average number of
employees by 2.0%, to 9,342 people, despite higher workforce numbers in
Austria and the initial consolidation of the Bulgarian district heating
company TEZ Plovdiv. This development is primarily the result of the
ongoing restructuring efforts in Bulgaria and Macedonia. However, personnel
expenses rose by 5.4%, to EUR 304.4m, as a consequence of higher employee
headcount in Austria and stronger contractually stipulated wage increases
mandated by collective agreements. On balance, EBITDA rose 3.3%, to EUR
362.3m.
One-off depreciation effects, decline in results from operating activities
(EBIT)
Compared to 2006/07, depreciation and amortisation rose 27.6%, to EUR
195.7m. In addition to the increase in scheduled depreciation, the
underlying reason for the overall rise is the extraordinary depreciation
resulting from impairment tests. The positive effect of EUR 22.1m in the
preceding year as a consequence of reversals of impairment losses for EVN’s
own power stations is in contrast to the negative profit contribution of
–EUR 12.0m in the 2007/08 financial year. This development is mainly
related to impairment losses on the distribution network in Bulgaria, which
were necessary due to the disadvantageous regulatory framework prevailing
on the Bulgarian market. As a result of the above-mentioned developments,
EBIT declined by 15.6%, to EUR 166.6m.
Financial results burdened by negative developments on financial markets
Income from companies included at equity as well as the income from other
investments combined to raise the profit contribution from Group
investments by 7.9%, to EUR 137.0m. In contrast, there was a considerable
decline in 'Interest and other financial results' of –EUR 31.3m, to –EUR
68.2m. The increase in interest income on non-current financial assets more
than compensated for the higher interest expense for non-current financial
liabilities, but not the development of other financial results. EVN was
not immune to the negative trends on global financial markets. Market value
related adjustments in the share prices of investment funds legally
stipulated as security holdings for employee-related provisions and
securities used for the temporary investment of free liquid funds,
negatively impacted earnings in 2007/08. On balance, EVN’s financial
results declined by 23.6%, or EUR 21.3m, to EUR 68.9m.
Group net profit below the previous year
Taking the development of the financial results into account, the profit
before income tax fell by 18.1%, to EUR 235.5m. The total income tax
expense amounted to –EUR 5.6m, or EUR 22.8m below the comparable level of
the previous year, which is primarily related to the decline in the profit
before income tax, as well as the higher share of tax-free income from
investments in other companies. For this reason, the decrease in the net
profit for the period in the 2007/08 financial year was comparatively more
moderate, declining by 11.2%, to EUR 229.8m. Minority interest climbed
34.3%, to EUR 42.9m. Group net profit for the 2007/08 financial year was
EUR 186.9m, or 17.7% below the preceding year.
Dividend proposal
The dividend policy of the EVN Group is oriented towards ensuring a
sustainable development of the company. Accordingly, the Executive Board
will propose a basically unchanged dividend of EUR 0.37 per share for the
2007/08 financial year, despite the decline in earnings.
Milestones in the 2007/08 financial year for further growth
On its domestic market of Austria, EVN made considerable progress on its
broad-based energy and climate protection project, which is divided into
several subprojects. Construction work on the third waste incineration line
proceeded as planned. As a result, total waste incineration capacity will
climb to 500,000 t annually upon completion in 2009. As part of the
district heating partnership with the city of Sankt Pölten, the
ground-breaking ceremony for construction of the district heating
transmission pipeline between Dürnrohr and Sankt Pölten with a length of 31
kilometres took place. Starting in the 2009/10 heating season, it will
supply about two-thirds of the city’s required district heat. Following
approval granted by Austria’s anti-trust authorities the district heating
activities of Stadtwerke St. Pölten (the municipal utility company of Sankt
Pölten) were spun off and integrated into a newly-established company in
which EVN acquired a 49% stake. In addition, EVN signed a cooperation
agreement with the Municipality of Amstetten to implement further district
heating projects on the basis of renewable energy sources in the Amstetten
region over the next few years.
The EVN Group also made further progress in its process of vertical
integration, increasing its indirect stake in Rohöl-Aufsuchungs AG (RAG) to
50.03%.
In the 2007/08 financial year, EVN concluded the acquisition of TEZ
Plovdiv, Bulgaria’s second largest district heating company, which supplies
district heat to approximately 40,000 customers. Construction also
proceeded on the hard coal fired power plant in Duisburg-Walsum, Germany,
which is being built in cooperation with Evonik Steag GmbH. Following
intensive preliminary work, EVN was selected as the preferrred bidder in an
international tender for a concession to build three peak load storage
power stations on the Devoll River in Albania. The signing of the
concession agreement is expected in the near future. The project will be
implemented in a 50-50 joint venture with a renowned international partner.
In the Environmental Services segment, WTE was awarded contracts for two
new projects in Poland and Lithuania. WTE also penetrated a new market
during the period under review based on the construction of a desalination
facility in Budva, Montenegro.
Outlook
The EVN Group fundamentally anticipates an increase in revenue for the
2008/09 financial year. The results from operating activities should also
improve, although, from today’s perspective the performance of the company
is unlikely to match the record results of 2006/07. A slight improvement in
the financial results is expected assuming a stabilisation of the situation
on global money and capital markets, in which case the Group net profit
will surpass the level of 2007/08. However, due to the recessionary
effrects of the financial and economic crisis, earnings could be below
expectations. EVN is striving to maintain its attractive dividend policy in
line with its value-oriented growth strategy.
The entire Annual Report 2007/08 is available at
http://www.investor.evn.at.
EVN AG
Corporate Communications
EVN Group
Stefan Zach
EVN Platz
2344 Maria Enzersdorf
Tel.: +43 2236 200-122 94
Fax: +43 2236 200-822 94
Mobil: +43 676 810 32 294
stefan.zach@evn.at
www.evn.at
11.12.2008 Financial News transmitted by DGAP
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Language: English
Issuer: EVN AG
EVN Platz
2344 Maria Enzersdorf
Österreich
Phone: +43-2236-200-12294
Fax: +43-2236-200-82294
E-mail: info@evn.at
Internet: www.evn.at
ISIN: AT0000741053
WKN: 074105
Indices: ATX
Listed: Foreign Exchange(s) Wien
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